This morning, Bitcoin dropped by 20 percent after South Korean regulators once again warned they might soon be banning cryptocurrency trading. South Korea makes up a big portion of Bitcoin trading, so this news has investors on edge.
In fact, the entire crypto market has taken a hit today, with all the digital tokens located in the top 100 list on CoinMarketCap showing a drop in value.
Over $160 billion has been chopped off the collective value of all the digital money listed on the website, all within 10 hours. This information further supports the extreme volatility in the market, and has many financial experts warning people not to risk their money in the crypto world.
However, markets have already begun to bounce back, though Bitcoin in still down quite a bit from where it was yesterday. It is also still quite far from the value it was worth last month, when one Bitcoin was worth close to $20,000.
The Finance Minister of South Korea, Kim Dong-Yeon, has explained that shutting down cryptocurrency exchanges is still under consideration, but such a decision would warrant serious governmental discussion beforehand. This statement has traders hoping that Seoul won’t totally ban trading, but will instead be installing more regulation.
South Korea plays a major role in cryptocurrency trading, and investors of Bitcoin in Seoul normally pay a higher amount compared to the rest of the market. Experts believe that the dip in South Korea’s trading volume may be because investors have become irritated with the inflated prices.
“The volumes have been declining steadily in both Japan and South Korea over the last few days,” explains Mati Greenspan, an analyst at trading platform, eToro.
He went on to share, “This morning, the combined volume from these two top cryptotrading countries dropped below 30 percent. Looks like they’re tired of overpaying for cryptos and waiting for the market to even out.”
Along with South Korea’s threats to ban crypto trading, the Chinese government has also taken measures to reduce its economy’s exposure to cryptocurrency by making initial coin offerings illegal, closing local exchanges and considering a ban on Bitcoin mining as well.
One factor that investors appreciate about digital money is its lack of regulation, so the continued addition of restrictions in many countries may cause the value of cryptocurrency to continue dropping.